On April 16 President Obama signed the Medicare Access and Chip Reauthorization Act (“MACRA”). MACRA abandons the Sustainable Growth Rate (“SGR”) for adjusting the Medicare Physician Fee Schedule and provides a new approach to paying for the services rendered by physicians and other healthcare professionals (i.e., dentists, ARNPs and PAs). Healthcare professionals should take the time to become familiar with this new reimbursement method during its 5 year phase in period. (MACRA addresses a number of other significant issues, including “gainsharing”, which are beyond the scope of this article.)

Starting in 2015 through 2019, the annual Physician Fee Schedule increase will be one-half of one percent (0.5%). Thereafter, the reimbursement rate paid to each healthcare professional will be adjusted to reflect his or her performance under what MACRA calls a Merit-Based Payment Incentive System (“MIPS”), which focuses on 4 areas:

  • Quality;
  • Resource use/efficiency;
  • Meaningful use of electronic health records; and
  • Clinical practice improvements.

CMS will seek input from outside groups in determining the specific areas that will be measured, in order to evaluate several quality measures, including:

  • Clinical care;
  • Safety care coordination;
  • Experience of patients and their caregivers; and
  • Population health management.

Healthcare professionals will receive reimbursement rate increases (or decreases) if their MIPS composite scores exceed (or fall below) the “average”; how that will be determined is not clear. Between 2019 and 2024, the total amount available annually for increases will be $500 million. Healthcare professionals’ whose composite scores fall below the average may see their reimbursement reduced by as much as 4 percent in 2019, 5 percent in 2020, 7 percent in 2021 and 9 percent in 2022.

CMS is tasked with providing quarterly data to each healthcare professional regarding their MIPS performance. This raises a number of questions, including:

  • Will CMS have the resources to accomplish this goal?
  • What are the consequences if the agency does not?
  • Will the MIPS “average” mean half of the healthcare professionals who participate in the Medicare program, almost by definition, sustain reimbursement rate reductions every year?

Healthcare professionals who receive a “substantial portion” of their reimbursement through Alternative Payment Models (“APM”) (or treat few Medicare beneficiaries) will be exempt from MIPS; exactly what will constitute a “substantial portion” has yet to be determined. APMs, like Medicare participating accountable care organizations (“ACOs”) and patient-centered medical homes (“PCMH”), are providers that bear both a risk of financial loss and an obligation to meet their own quality measurements. Healthcare professionals who qualify for inclusion in this exemption will receive a reimbursement rate bonus of up to 5 percent (5%) in 2019. It seems likely the APM exception will serve as an incentive for healthcare professionals to join APMs.

In a Congressional session where little is expected, the two political parties and the two Houses of Congress have found something substantive in the healthcare arena on which to agree- a way to replace SGR. Only time will tell whether MACRA will promote the recovery for healthcare professionals’ fortunes and improve the healthcare delivery system.

Please click here to view the article as it appeared in South Florida Hospital News.

Stephen H. Siegel is Of Counsel for the statewide law firm Broad and Cassel’s Fort Lauderdale and Miami offices. He is a Florida Bar Certified- Health Law Attorney and can be reached at shsiegel@broadandcassel.com or 305-373-9424.